By SANDY SHORE
AP Business Writer
Industrial metals and oil prices are dropping as new signs of a slowdown in the Chinese economy suggest that demand for basic materials will weaken.
China said Tuesday that its trade growth plunged last month because demand softened in Europe and in the U.S. Imports grew at a rate of 6.3 percent, about half the level in May. Export growth was 11.3 percent, compared with 15.3 percent in May.
Growth in Chinese manufacturing also fell to the lowest level in seven months. Factories there have cut purchases of raw materials because of weaker demand.
China, which is the world's second-biggest economy behind the U.S., is a huge importer of materials such as copper, oil and soybeans.
However China's commodity imports were off 10 percent by volume in June compared with a year earlier, the worst result since January 2009, according to Credit Agricole CIB economist Dariusz Kowalczyk. Imports of copper and waste scrap were down 11.9 percent while oil imports dropped 35.4 percent.
Copper for September delivery fell 3.35 cents to end at $3.398 per pound, October platinum declined $16.20 to $1,429.70 an ounce and September palladium dropped $7.30 to $576.60 an ounce. September silver dropped 56.2 cents, or 2 percent, to $26.882 per ounce.
Benchmark oil fell $2.08, or 2.4 percent, to end at $83.91 per barrel in New York.
Most commodities finished lower after concerns emerged about a bailout plan for Spain's banks. European Union finance ministers have supported some terms of the plan. Those concerns caused the euro to weaken against the dollar.
Commodities are priced in dollars. A stronger dollar means they become more expensive for traders who use other currencies such as the euro.
Dave Meger, vice president of metals trading at Vision Financial Markets, said that weaker demand for metals, including gold, is typical for this time of year when there is a lack of substantive news to drive prices.
"They're called the 'summer doldrums' for a reason," Meger said.
Gold for August delivery fell $9.30 to finish at $1,579.80 an ounce.
In other trading, corn for December delivery fell 12.5 cents to end at $7.175 per bushel, September wheat dropped 7 cents to $8.2125 per bushel and November soybeans ended down 9.25 cents at $15.385 per bushel.
Heating oil dropped 2.95 cents to finish at $2.7195 per gallon and wholesale gasoline declined 1.25 cents to $2.7469 per gallon. Natural gas plunged 14.6 cents, or 5.1 percent, to $2.737 per 1,000 cubic feet.
AP Business Writer Joe McDonald in Beijing contributed to this report.
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